Author Archives: theusernamewhichismine

A conversation with Gail Tverberg

After I wrote my post on theoildrum.com, I found that one of its writers, Gail Tverberg, is still highly active in the blogosphere at here website ourfiniteworld.com. I therefore reached out to her by email to ask some questions regarding her time at theoildrum.com and her time since then. I felt the conversation was enlightening, so I have (hopefully with her permission) copied our email conversation here in hopes others can learn as well

Dear Gail Tverberg,

I’m a biology researcher, a blogger on wordpress, and a sometimes internet historian.  I’ve recently found the blog theoildrum.com, which I think is a fascinating window into the time when Peak Oil was more talked about.  I personally remember watching An Inconvenient Truth in school and being taught in class about Global Warming and Peak Oil on the same day.  I can remember walking out of school being very scared for the future thinking about how we could make earth entirely uninhabitable through oil.

Yet while Global Warming is still talked about, Peak Oil has faded from view, despite the work put in by you and the others at theoildrum.com.  I was wondering if I could ask just a few questions about your work there just so I could get to know your feelings about all this.  And I was wondering also if I could put my questions and your answers together on my blog, streamsofconsciousness.blog.  I’ve already written a tiny bit on what I found on your blog, but I’d like to know more.

1. How big/popular was theoildrum.com when you were part of the team there?  I remember Peak Oil being a topic of conversation during my school years, but I wasn’t on the internet as much so I don’t know where it was talked about.  Was there a large amount of web traffic coming to theoildrum.com? 

2. How popular/common was the viewpoint of theoildrum.com regarding Peak Oil?  Did you get a lot of pushback?  As I said, I learned about Peak Oil in school but I don’t know how much it was in the public consciousness at the time.

3. Did your views evolve during your time at theoildrum.com?  The blog was active from around 2005-2013, though I confess I cannot find exactly when you worked there, did your views on Peak Oil change and shift over time or did you feel that events continued to prove your thesis correct?

4. I have read some of your current blog, ourfiniteworld.com, and I’m interested in your current views.  Are they much the same as when you worked at theoildrum.com, or have they changed since then?

I hope your current work is going well, and I thank you very much for any answers you can give me.  Have a pleasant day!

And Gail’s response:

Dear Anonymous,

Thanks for writing. I am glad someone is interested in TheOilDrum.com.

As background, you need to understand that there are really three quite different theories of what our problem is.

A. Peak oil (as well as Peak natural gas and Peak Coal). According to this theory, the growth of the economy is limited by fossil fuel use. Oil, coal, and natural gas are all quite separate. The amount available is limited by technology and something called “Energy Return on Energy Invested.” At some point, if EROEI gets too low extraction stops. In any field, extraction naturally peaks and declines. Low EROEI makes it impossibly to add a huge amount of additional energy supply.

Demand is believed to be pretty much unlimited. People will keep “demanding” more fossil fuels.  Price will keep rising, to get all resources out that can be technologically extracted. While oil will deplete first, coal and natural gas can continue afterward. In fact, wind, solar, and other energy types can reasonably substitute in the future if their EROEIs are high enough.

The economy will keep going on much as before, after “peak oil,” as the transition is made to other fuels. While running out is sort of a problem, rising prices, substitution, and conservation are likely to “save the day.”

“Preppers” can likely continue in the future, as they live today, if they adequately plan ahead. 

B. Global warming / climate change is closely related to Peak Oil theory, but without EROEI limiting what can be extracted. 

Global warming morphed into “climate change” when it became clear that the changes that are occurring are not all in the direction of an increase in temperature.

Under Climate Change theory, there is a very large amount of fossil fuels available for possible future extraction. For example, the UK has an enormous amount of coal for possible use, far under the North Sea. With rising prices or improving technology, perhaps someone might get the benefit of buying this coal. 

Under this theory, it is imperative that people make every effort to stop fossil fuel extraction, because it will not stop by itself. Instead, it will cause huge temperature changes. Humans and their use of fossil fuels seem to be a big part of what has caused the higher temperature changes that we have been seeing to date.

This has become a major political cause.

C. Gail Tverberg’s Physics and History-Based Theory of  Overshoot and Collapse

Our economy is a physics-based system. In fact, it is a “dissipative structure,” just as the human body is a dissipative structure. It requires a mix of energy types, of the right kinds, in the right quantities, or it will collapse, just as a human body requires somewhat the right mixture of foods, in the right quantity, or it will collapse. In fact, even if the economy gets the right mixture of energy types, it will still tend in the direction of overshoot and collapse, just as humans will die at the end of their normal lifetimes. 

In the case of economies, one of the usual limiting factors for energy products is diminishing returns, because the easiest to extract energy supples are removed first. In fact, this same kind of problem occurs for fresh water supplies and minerals of all kinds, indulging copper and lithium. Population, however, continues to grow, so that energy per capita starts falling. With less energy per capita, it becomes impossible to grow enough food for the rising population. Other types of goods and services become more scarce as well.

We know that with humans, a small drop in food supply can temporarily be tolerated (but the population will tend to lose weigh), but a bigger long-term drop cannot. People will become more susceptible to disease and may die.

With economies, the financial system is one system that is likely to be particularly stressed by a smaller supply of energy products. With a falling supply of energy products, ever-fewer goods and services can be made. Thus, supply lines are likely to break. Empty shelves in stores are likely to be a problem. Fewer and fewer airline flights will be offered. Fewer and fewer jobs that pay well will be available. It will become increasingly difficult to make repairs to electricity transmission lines after storms, so lack of electricity will become a major problem.

Financial systems will be stressed because these are based on the assumption of ever-lasting growth. People take out loans assuming that they will have a job that will pay well in the future. This is likely not to be the case. Businesses take out loans assuming that they will sell an increasing quantity of goods and services. Debt defaults will become a problem. Share prices are likely to fall.

It is quite possible that inadequate energy supply will never be recognized as the source of collapse, because governments and educational institutions can never tell people what the problem is. Partly, the problem is difficult to understand. (My brief description here misses a whole lot.) The problem of inadequate supply of goods and services is likely to manifest itself as increased fighting among countries. It may manifest itself as over concern about illnesses that, in previous times, would have quickly evolved themselves down to very high frequency, low severity events that mostly removed a few ailing elderly people. (Keeping people inside is a way to artificially reduce the “demand” for goods and services.) 

A likely outcome of inadequate energy supply is that financial systems will fail. Governments will fail. People are likely to find that the money in their bank accounts can’t really buy goods and services. The situation could look like a Weimar Germany situation, with a huge amount of money trying to buy goods that really aren’t there, or it could look like many people being cut out of the competition for buying for goods in the first place, by pensions being cancelled and money in bank accounts now longer being available. In this case, it is as if debt defaults wiped out the value of bank accounts. Fields will produce less, because machinery used to plant and harvest crops will fall into dis-repair from lack of spare parts, or lack of fuel. 

The expected outcome is that a large share of the human population may die. In fact, most species have historically become extinct. This may occur with humans, as well. On the other hand, humans and pre-humans lived through ice ages, so they may live through a financial collapse, as well as any change in climate. In a finite world, the climate is always changing. It is hubris on our part, to think that we can somehow make the climate do what we want it to. It will continue to change. In some ways of thinking, the timing is getting close to the correct timing for another ice age.

In fact, the economy is set up to expect change and to adapt to change in the climate and in the availability of resources. It is a self-organizing system in which all species of plants and animals have more offspring than they need to replace themselves. The expectation is that “survival of the best adapted” will fix any problem that takes place. While some offspring may die, the survivors will be better adapted to the changing conditions. If humans remain, they will move to habitable places and again flourish and multiply until they again reach a population bottleneck. At that point, population is likely to again collapse.  

Now, to try to answer your questions:

On Nov 11, 2022, at 8:00 AM, User Name <theusernamewhichismine@gmail.com> wrote:

Dear Gail Tverberg,

I’m a biology researcher, a blogger on wordpress, and a sometimes internet historian.  I’ve recently found the blog theoildrum.com, which I think is a fascinating window into the time when Peak Oil was more talked about.  I personally remember watching An Inconvenient Truth in school and being taught in class about Global Warming and Peak Oil on the same day.  I can remember walking out of school being very scared for the future thinking about how we could make earth entirely uninhabitable through oil.

I have never been a Peak Oil theorist. Quite a few of the writers at The Oil Drum were very much interested in Peak Oil theory, but a variety of different theories were discussed. I was not well liked at The Oil Drum because the theory I was talking about was very different from theirs. It was much more financial in nature. It didn’t end up with a “happily ever after” stories for survivalists growing their own crops.

Yet while Global Warming is still talked about, Peak Oil has faded from view, despite the work put in by you and the others at theoildrum.com.  I was wondering if I could ask just a few questions about your work there just so I could get to know your feelings about all this.  And I was wondering also if I could put my questions and your answers together on my blog, streamsofconsciousness.blog.  I’ve already written a tiny bit on what I found on your blog,

I would caution you to be careful in the comparisons you make. There is “oil” and there are “liquids.” It is not fair to compare “oil’” to “liquids.” The various organizations try to confuse people as much as possible by adding in more and more, close-to-worthless products into the “liquids” category. They do this, to avoid showing that the “good stuff” is running out. What we are left with is a mix that doesn’t doesn’t meet the needs of society. You seem to have missed this point in the post you link to.

but I’d like to know more.

1. How big/popular was theoildrum.com when you were part of the team there?

The number of subscribers was a little over 20,000. The number of subscribers to Our Finite World is also something over 20,000 now. Articles were copied over on other sites, both OFW now and TOD then. My theories don’t make it into popular discussion, because they are not easily summarized on the back of a napkin. Also, no politician would ever want this story to get widely distributed. Educational institutions want the fiction to be given that “of course,” there will jobs for students in the future that will pay well. While there may be energy problems, they are easily solvable energy problems.

 I remember Peak Oil being a topic of conversation during my school years, but I wasn’t on the internet as much so I don’t know where it was talked about.  Was there a large amount of web traffic coming to theoildrum.com? 

2. How popular/common was the viewpoint of theoildrum.com regarding Peak Oil?  Did you get a lot of pushback?  As I said, I learned about Peak Oil in school but I don’t know how much it was in the public consciousness at the time.

Both Peak Oil and Climate Change theory depend on a high price of oil (and coal and natural gas) allowing huge amounts of these types of energy to be extracted. I am very doubtful that this is the case. We are now reaching affordability limits on fossil fuels of all kinds. The problem is that the price cannot rise high enough to get the resources that look like they are in the ground, to be extracted, out. This has been Russia’s big problem. It needs a higher price than it was getting from Europe to make the extraction of its natural gas sufficiently profitable. In fact, coal and oil have had much the same problem. People who developed the EROEI theory left out the need for adequate tax revenue for governments, among other things.

Once the price of oil dropped back down in late 2008, and growing oil (or liquids) seemed to be available, the Peak Oil theory disappeared from discussion. Peak oilers had “cried wolf” too often.

I was talking about financial problems associated with energy limits from the beginning. My theory keeps growing and expanding, as I learned more about the real nature of the problem.

3. Did your views evolve during your time at theoildrum.com?  The blog was active from around 2005-2013, though I confess I cannot find exactly when you worked there, did your views on Peak Oil change and shift over time or did you feel that events continued to prove your thesis correct?

I started writing my blog OurFiniteWorld.com in March 2007. In fact, I wrote all my articles on that site, until August, 2007. Sometime shortly after I started writing articles on OFW, TOD asked my permission to copy some of them over onto its website. Not long after, they wanted me to be a regular staff member, and somewhat later they wanted me to be an Editor. Other staff members were mostly college professors or graduate students. I was the only person who did not have a full time job doing something else, so I ended up doing a whole lot at TheOilDrum, between September 2007 and October 2010, including a lot of duties as Editor or the site. 

I wrote only at TOD (not OFW) between September 2007 and October 2010. There was a lot of conflict at The Oil Drum. The two people who started the site came from pretty much opposite perspectives. “Heading Out” was a professor of coal mining technology at a university in Missouri. He thought perhaps coal could replace declining oil supply. “Prof. Goose” was a political science professor from a university in Colorado, interested particularly in preventing climate change. Leanan (a woman)  (who linked to articles every day) also came from a climate change perspective. Several staff members were interested in modeling exactly how oil supply might run out. 

TOD staff members coming from one perspective were very protective of their particular perspective. There were commenters who would push back in argument with respect to articles written, but there was also quite a bit of conflict among staff members.

There was a reorganization of TOD in November 2010, which I wrote about in this post. https://ourfiniteworld.com/2010/11/21/changes-planned-to-the-oil-drum/

Basically, some of the other staff members thought that I had too much power. I was deciding what would run, when, to a significant extent. Also, too many of my own posts did not put forth the “correct” peak oil perspective, at least in the view of other staff members. After the reorganization, there would be a staff of six editors, and there would be a vote to see which articles would be accepted. I would go back to writing on OFW, and TOD would copy over only those articles that it agreed with. There would be a paid TOD staff member who would take care of copying over articles from OFW to TOD, as well as performing other duties.

Technically, my titlea didn’t really change at TOD. I was both a Contributor and Editor from whenever I started being an editor (sometime in 2008) until the site ceased operations in 2013. Nate Hagens was an editor as well, but in practice, I ended up doing a whole lot of the day-to-day work, up until the change in November 2010. Nate was more involved with recruiting staff members and keeping peace among the staff. He also was involved with the finances of the site. I was not involved with the finances of the site or with things like potential law suits against the site.

OFW has grown and flourished because I was telling a different story that seems to be right. Neither the Peak Oil theory nor the Climate Change story is really right in my view. 

Climate change is a popular story because indirectly, it forces people to figure out what they would do with much less energy supplies. In fact, we are losing energy supplies regardless of what we do because of affordability issues. The climate change story allows people to think that they can voluntarily leave fossil fuels. We are losing access to fossil fuels because of the way the self-organizing system works. The climate change story makes these problems seem modest and solvable. Thus, the climate story is popular with both politicians and educators.

4. I have read some of your current blog, ourfiniteworld.com, and I’m interested in your current views.  Are they much the same as when you worked at theoildrum.com, or have they changed since then?

My views are basically the same, with many additions and refinements. I tried to explain a little bit of my current views above. My view of the timing keeps getting moved farther and farther back. 

The End of Growth Part 4: At what point is China no longer a bubble?

I’m still reading The End of Growth by Richard Heinberg. As a reminder, Heinberg claimed (in 2011) that the world’s economic growth was essentially over, and that in the future any “growth” would be an illusion created by nations fighting over an ever shrinking economic pie. A nation may have a quarter or two of growth, or some prolonged growth as they stole more of the pie from their neighbors, but taken as a whole there was no more economic growth left for the world, largely because Heinberg also thought there was no more oil left for the world. The problem or course is how do you explain China?

It’s a lot easier to brush away claims of “growth” in the Western world, growth has been anemic (although still positive) for the last decade and a half since the Financial Crisis. And although US GDP has growth by 20% or more in that time, most Americans don’t “feel” any different, and so it’s easier for Heinberg to claim (as he does earlier in the book) that this growth is all just an illusion funded by debt. But China is different. Growing their GDP at near double digits for 3 decades straight cannot be easily ignored, and the Chinese middle classes have definitely seen massive changes in their lifestyles as almost anyone today in China can afford more and better stuff than their parents could. Houses are larger, food is more varied, technology is cheaper and easier to get to, China continues to experience massive economic growth, and that’s a difficulty for Heinberg who claims that’s impossible.

The first thing he does is punts, like anyone who doesn’t like the outcomes of China growing economically, Heinberg claims China’s growth is really just a bubble ready to collapse. I’m not about to say that China’s economy is perfect or that it doesn’t contain massive real estate speculation, but I’ve been hearing “China’s economy is a bubble that’s about to collapse” for over a decade now and I’m wondering when people will stop claiming this. A bubble is no longer a bubble is it never pops. China’s economy does experience downturns like everyone else’s, but I haven’t seen any evidence that the whole thing has or will soon collapse, as the world “bubble” would imply.

Heinberg goes on to say that China’s growth is also unsustainable because of falling exports to the West, depleting resources like coal, too many old people with too few young people, and all the other stuff that people have been claiming will implode China any day now. My question for today is: when does this end? If China continues growing at a steady clip, at what point do people update their theories to fit the facts? At what point can we conclude that China’s economy is not a bubble and has the momentum to withstand all the same shocks and stresses as a Western economy? China’s economy has more than doubled since Heinberg wrote his book, and I’m curious to know if he would accept this as disproving his theory or if he’s pushed “the end of growth” date back like so many pushed back “the end of oil.”

Now again, I’m not saying China or its economy is perfect. The Chinese Communist party is a totalitarian nightmare committing genocide in its own boarders and threatening war outside of them, the Chinese economy has vast structural problems that the government papers over, Chinese demographics are not ideal for a growing economy and there is no easy solution to any of these. But I don’t think China is going to collapse any time soon, I don’t think it’s economy is just a bubble, and I think people have been claiming the Chinese Sky is Falling for far too long without ever admitting that they are divorced from the actual facts.

Some philosophers are just preachers

The word for “preach” in English comes from the word “proclaim” in Latin. It did not necessarily have religious connotations in that language, you could proclaim just about anything. And yet today the word “preach” in invariably tied to a specific type of proclamation who’s connotation cannot be separated from the word. “Don’t preach at me,” “he’s preaching to the choir,” preaching connotes a way of speaking that accepts no argument and engenders no debate. What is preached is correct (as believed by the preacher), regardless of whether you like it.

That’s why it’s amusing how many philosophers I’ve seen who are just preachers and not, you know, philosophers. Not all of them mind you, some philosophers are ready willing and able to dive into the weeds of actually proving their conclusions (or at least trying to). But I’ve been to church enough times to know when I’m being preached at, so the proliferation of dime-store philosophers online are to me no more worthwhile than the doomsday preachers on the street corners.

Today’s preacher de jure is whoever the hell wrote this which was linked to me as a “compelling argument” in favor of utilitarianism and effective altruism. It includes this lovely passage:

You know what? This isn’t about your feelings. A human life, with all its joys and all its pains, adding up over the course of decades, is worth far more than your brain’s feelings of comfort or discomfort with a plan. Does computing the expected utility feel too cold-blooded for your taste? Well, that feeling isn’t even a feather in the scales, when a life is at stake. Just shut up and multiply.

I’m sure this sounded good as an imaginary debate in the author’s head, “FACTS DON’T CARE ABOUT YOUR FEELINGS” and all, but it gets to the type of anti-utility preaching that I’m surprised a supposedly utilitarian author is falling into. Anti-utility preaching is what I would define as the type of preaching done not for others but for oneself. Even if you are religious, even if you do think preaching can change people’s minds for the better, there are some preachers who have no desire to do that and just want to feel righteous by screaming at all the “sinners.” These preachers aren’t changing minds, they aren’t being productive in any way, and in fact are clearly driven by vanity, which most Christians and other religions think is a sin. In the same respect, if the utilitarian who wrote the above passage were really serious about changing minds, they should probably have had the self-awareness to realize that this method isn’t effective and is probably just turning more people off of their philosophy because they’re being a dick.

Just for fun, this leads me to a thought experiment: effective altruism of the kind this person is advocating for tries to use a kind of “ethical calculus” to calculate the exact goodness or badness of any action, and thus the correct action is the one that maximizes goodness and minimizes badness. Is it worth mutilating a child in order to perform an experiment which will cure cancer? Add up the goodness and badness of each scenario and find out that yes, that is perfectly valid. Even stranger, is it worth killing one person to cure everyone’s hiccups forever? Strangely enough yes, yes it is, this utilitarian preacher reasons that the tiny amount of badness caused by a hiccup, multiplied by *everyone* is greater than the amount of badness from killing of a single person.

So let’s go a tiny bit further, if we accept that effective altruism is truly the best morality, then it must also be true that goodness is maximized by more and more people becoming effective altruists. This follows logically from the fact that effective altruists are going to be better than other folks at making “the right” choices and therefore increasing goodness and decreasing badness with their actions. So in keeping with the hiccup example above, decreasing the number of effective altruists in the world will decrease the amount of goodness and so there must be some reduction in effective altruists that adds up to being worse than murder on the balance of goodness and badness in the world.

Therefore I can confidently state that by its own logic this article is worse than murder. It tangibly reduced my desire (if there ever was any) to be an effective altruist just so I don’t become associated with people like the writer, and it probably did the same to most people that read it. The author can take a nice warm bask in their own vanity, while feeling happy that they got to preach to the sinners on the internet. No minds were changed, no one was “saved,” but the preacher felt damn good doing it and isn’t that really what’s important?

Final addendum, I just looked it up and it seems Eliezer Yudkowsky was the author of this trash. But I don’t feel like rewriting the above post to include that fact so I’ve tossed it here at the end.

The End of Growth: weekend extra part deux

I spoke more with my friend about The End of Growth by Richard Heinberg. As a reminder, the book posits that (after 2011) economic growth is no longer possible in our world. My friend opined that it would be better for everyone if companies were incentivized to focus on sustainability instead of growth.

I think this focus on sustainability is true and necessary, but here’s my thought: sustainability is an economic externality, and if we want it we must make taxes or laws to encourage it.  We already do in some cases, my town has a minimum size of lawns for houses, the reason being that we don’t want to tear up all the trees and pave over all the grass in pursuit of houses.  The trees and grass are considered an externality, if the housing market had no rules then for many companies it would be more profitable to build bigger homes and more homes on the same size lot, with no trees or grass at all. The grass especially is important however, as rain soaks into it, and if you pave over the grass then that rain just runs downhill to somewhere else.  If all of the city was paved over, the lowest elevations would be flooded with every rainstorm. If that happened then one of two things would have to happen: either the city would have to pay billions upgrading the storm drains (essentially privatize profits and socialize loses for the housing industry) or the lower elevation areas would quickly become the poor slums where people had to abandon their flooded houses in every rainstorm.

So we already in some cases make laws dealing with sustainability and externalities, you can’t build whatever you want in a national park because we’ve decided that those need to be sustained for future generations. Now the problem is that not everyone agrees on what is good sustainability and thus what should be taxes or forbidden by law.  A coalition of YIMBYs and housing moguls in my city are trying to change the law to eliminate lawn minimums, saying they prevent the construction of more housing.  I’d say I agree with them on the balance, but sustainability advocates have their own point: what about all the trees and all the rain?  Shouldn’t we have a city that isn’t baked by the sunlight and not flooded in every storm?

To that same point, sustainability taxes/laws have been proposed in many other ways, but they always come with tradeoffs.  A carbon tax encourages us not to increase CO2 levels, but what about the working poor who can no longer afford to drive to work?  Access to a car is very closely linked to upward mobility, because if you can only work in jobs you can walk or bus to then your options are severely limited.  We can also put taxes on plastic to discourage single-use waste that is trashing our oceans, but is taxes on our plastic use worth the hit that would be taken by modern biology and chem labs, some of which are researching the very medicines we needed during the last pandemic and will need again during the next one? Everything in a modern bio or chem lab is single use in order to meet very strict standards of reproducibility by preventing contamination. The lack of single-use plastics would either require us to use more expensive alternatives (single-use glass) or require us to relax our standards (multi-use glass where we accept that molecules and biologics from a previous experiment won’t always be removed by the cleaning process).

Sustainability requires tradeoffs, it’s something we should strive for but we need to understand and be mindful of those tradeoffs.  Companies and people will always be pushed by economic forces, if there was a massive carbon tax I wouldn’t own a car, and if there was a single-use plastic tax then my lab might not be have money to function.

The End of Growth: weekend extra

While talking about The End of Growth by Richard Heinberg with a friend of mine, my friend brought up two important points. One I’d like to discuss today, the other one tomorrow.

For today’s topic, we discussed how it seems a shame that companies have to grow to survive. Everything around a company is always growing, so if a company isn’t itself growing them in relative terms it’s shrinking. Wouldn’t it be better if companies didn’t have to laser-focus on growth? And what does that means for the economy as a whole, that the companies that make it are focused on growth at the expense of all else?

This topic made me remember the “Red Queen Hypothesis” in biology. In Through the Looking Glass, the Red Queen tells Alice “Now, here, you see, it takes all the running you can do, to keep in the same place.” This gave its name to a hypothesis in biology that species must be constantly evolving and proliferating or else they go extinct. In much the same way that companies area always competing, so to are species always competing, and the competitor that cannot go forward will go extinct. I’d idly curious if anyone has adapted the Red Queen hypothesis to economics, is this biological law really part of a broader law on competition?

But more to it than that, I think the constant strive for growth is a very human feeling to have. We are all ruled by emotions of wanting more or at least of not wanting to lose what we already have. That in turn forces us to work every day to make the money we need to keep what we’ve got and get what we want. I know a lot of people my age would love to be able to get a better job to buy a house and start a family, and that requires striving and working towards that goal. And I know a lot of our parents already have a house, maybe even a fully-paid for house in a nice location with a large 401k. Many of our parents could probably sell their house and car, buy a small cottage in the middle of nowhere, and live on baked beans and rice for the rest of their life using only a small fraction of their wealth every year. It wouldn’t be a glamorous life, but commuting once a week into town for beans is surely easier that commuting every day to work? But no one does (or at least very few do) because they’d like to keep their lifestyle and even improve it with a vacation or a cruise every now and then.

Companies are run by people and those people have the same emotions we all do, they want to get what they want and keep what they’ve got. Not just the managers and the C-suite but the investors and the workers as well. The tech workers at Amazon want to move up in the hierarchy or at least get a good recommendation for their work on a stellar project so they can move to some better job. Failing that they’d really hope Amazon stays profitable so they don’t get laid off. The investors in Amazon want their investment to grow or at least not shrink too much, as they’re counting on it to maintain their lifestyle once they retire. Jeff Bezos would probably like to own a Mars colony or at least not have to sell the Washington Post. They all want more and so they all push the company in their own ways to do more.

I think it’s a far fear to have that companies seem focused solely on growth at the expense of all else, because we can all see that many of them will hit an unavoidable wall and stop growing. And it leads to the question of what happens when a company stops growing, when they hit a wall, what happens? I think all companies do eventually find themselves hitting a wall they can’t surpass due to cultural or technological reasons (Amazon and Facebook/Meta may be hitting it now).  But it’s important to realize there are always new companies ready to take their place.  New companies can always be formed using new technology, and they in turn can use resources more efficiently and effectively, leading to higher and higher growth.  Those companies mature, hit a wall, and someone new comes to take their place. 

Just look at Tesla or a 2022 Toyota Corolla.  70 years ago it took a massive amount of oil (10 miles to the gallon!) to drive cross-country, and the car you sat in was made required a ton of man-hours to build and wasn’t even all that safe.  Today I can get from here to Minneapolis using no oil at all (I can even charge as solar powered charging stations), and the car was made mostly by machines and not men, and it’s got a huge number of safety features making me much more likely to make it to my destination.  In real economic terms the car I drive today is worth way more than the cars driven 70 years ago, even the cars driven 10 years ago, and continued advances in technology show no signs of slowing. 

Even if exactly the same number of cars were made today as were made 70 years ago, we would say there’s been economic growth as those cars are more efficient, safer, and cheaper to build in terms of man-hours.  The supply of cars has not been constant however and has in fact grown, the labor freed up from people who used to work in a Ford factory has been refocused into healthcare and IT, leading to advances there.

That economic growth is good for all of us, and it came about because some new companies were laser focused on growth. Toyota and Tesla have improved the cars we use in both safety and utility, and someday a new company may come to knock them off their perch. That new company will continue to grow by providing us with better products than what came before, and each new company is focused on growth because, again, the people running these companies are all humans with the very human desire of wanting more. I don’t think you can end the desire for growth without ending humans

The End of Growth part 3: Peak Oil

I’m still going through The End of Growth by Richard Heinberg. His central thesis is that in 2011 the world economy completely changed and we can expect no real economic growth happening after that year. He furthermore discusses Peak Oil and how it’s the key to understanding the end of growth. Here’s his first prognostication on oil:

The US had been the world’s primary oil producer, but by 1971 its oil production peaked and began to decline

This was a very defensible position in 2011. Not so today when we’ve seen US oil production skyrocket once again and far outstrip the highs of 1971. Even in the absolute depths of the Coronavirus pandemic, when oil prices briefly dipped below zero dollars and producers had to pay to get excess oil shipped out, oil production was higher than the “peak” of 1971.

An aside: how can oil prices dip below zero but oil wells still afford to pump? Well the coronavirus pandemic was temporary, we all knew it was temporary, and oil wells kept pumping in expectation of the good times just around the corner. Those good times have indeed come to pass, and the price of oil has rocketed back up again along with new production to feed this demand. The price was below zero, but that doesn’t mean you could get oil for “free,” it was only below zero if you showed up to an oil well with the proper equipment and container vehicles to ship oil off the property.

Anyway, Richard Heinberg goes on to sketch out the Peak Oil scenario that he believed in 2011 was an inevitable future. I don’t want to just quote his book verbatim but I’ll summarize it here:

  • Around the year 2010 oil production inevitably stagnates, leading to oil prices skyrocketing. This causes an economic crash
  • The economic crash leads to economic contraction, meaning oil demand slackens and oil prices fall
  • Oil prices falling means demand can pick back up
  • …but then oil prices also go up, leading to yet another economic crash
  • We repeat theses steps ad infinitum, each boom/bust cycle happening quicker and quicker and causing more and more social chaos
  • No force is able to stop this cycle, price volatility precludes oil investment which means supply remains constricted

He goes on further to state that this scenario isn’t actually a prediction of the future, it’s a description of the past

  • This Peak Oil cataclysm began in 2008, led in part to the Financial Crisis, and continues to the present time (2011 when Heinberg wrote his book)

This is all very interesting, especially the key feature of his theory that new supply will never be be able to be produced in quantities that will keep up with demand. He claims that rising and falling prices will ensure that there is too much volatility to make the investment sound, and that in part is his theory for why this cycle can’t be escaped with oil. It’s an elegant theory, but it’s a theory that’s been proven false since he wrote it, oil supply did increase and volatility wasn’t an impassible barrier for new production.

Even without the benefit of hindsight it would be unreasonable to believe his theory in the first place as it assumes no one has any sort of agency during this crisis, everyone can only watch helplessly as the price of oil rockets up and down. Let’s discuss the story of Joseph in the bible for a second: The Pharaoh foresaw that 7 years of good harvests would be followed by 7 years of famine and asked Joseph what he could do to prevent calamity. Joseph explained to him the simple principle of storage and rationing: store food during the good times and hand it out during the bad. Instead of a boom/bust cycle leading to massive death and destruction, Egypt under the Pharaoh and Joseph had a smoothed-out supply allowing them to weather the storm and continue living and farming. I bring this up not as a bible lesson but to explain that we have known for thousands of years how to prevent the exact cycle described by Heinberg’s theory from occurring. If we can predict something like this then we can prevent it using even the simplest of economic activities such as storing and rationing.

The United States even has an entire system dedicated storing and rationing oil: the Strategic Petroleum Reserve. When prices are low, the US buys oil and fills the reserve, which keeps the price high and encourages producers to keep producing and investing. When prices are high (such as 2022), we empty the reserve, selling the oil and alleviating the worst effects of the shortage. And the US government isn’t the only one engaged in this, from OPEC to Exxon-Mobile, nearly every oil-producing entity has or pays for a way to store oil during the glut and sell it during the dearth, to mothball unneeded production but then turn it back on when prices spike. The Peak oil cycle never happened, Heinberg theorized that oil supply would stay relatively constant as the volatility precluded investment but instead the volatility was mostly smoothed out by both market and government forces and investment (and production) have continued to rise.

As I said, the cycle sketched out by Heinberg isn’t just theoretically unsound it was disproven by history. He suspected that low oil prices would allow economic growth, leading to high oil prices and another crash. But while oil prices did dip not long after his book came out, they dipped because of sky-high supply from the US and OPEC not contracted demand due to an economic crash. Let me state that again: falling demand did not cause oil prices to crash, rising supply did, which runs completely contrary to Heinberg’s Peak Oil theory. Oil investment has continued and oil production has increased, the US currently produces around 12 million barrels of oil a day, more than any time in the 1970s and more than double as much as was produced when Heinberg’s book was published. I wonder what he would think about that.

Double post: does anyone remember The Oil Drum?

I’m doubling posting today because I have a separate thought that I want to get out. Does anyone remember the site “The Oil Drum“? In my poking around the Peak Oil mediasphere, I found a few references to it. It seems that during its existence from mid 2000s into 2013, it was a non-profit project spreading the Good Word of Peak Oil and doing a lot of research on that subject as well.

Here’s a chart they show to prove that Peak Oil is happening and that 2008 is definitely the peak. The figure was produced in 2008, and the commentary reads:

Comment: The highest estimate in [this figure] is from the US Energy Information Administration. It is based primarily on demand, under the assumption that OPEC will always have additional oil available, if needed.

The next highest forecast is from the June 2008 newsletter of the Association for the Study Peak Oil and Gas-Ireland, prepared by Colin Campbell. This is a very well-known forecast. A link to it can be found here. It forecasts a peak in 2008, with a fairly slow decline after 2008.

The next highest forecast is that of Tony Eriksen (“Ace”) of The Oil Drum staff. A link to his forecast can be found here. In this forecast, Ace considers the various Megaprojects, and when they are expected to go on line. He also considers expected decline rates on existing fields. He believes that we are on a plateau now that may last a few years. After that production will decline.

The remaining estimate is by Matt Simmons. In this interview, he mentions that he expects crude oil (not “total liquids”) to drop to 65 million barrels a day by 2013. I have attempted to translate this comment into an equivalent projection, on a total liquids basis. It ends up being just a bit below Ace’s projection.

It seems like for the year 2019 (the year before COVID sent the economy haywire), the Oil Drum experts predicted about 60 million barrels per day of oil production. ASPO was more bullish at 70 million barrels per day. Meanwhile the US Energy Information Administration gave a much higher prediction, but the Oil Drum seems to claim that US EIA was making numbers out of thin air in its mistaken belief that oil production would be driven solely by demand. Yet US EIA’s prediction of 100 million barrels per day was just a hair above the real number of 95 million barrels per day. Maybe the US EIA (an agency withing the Department of Energy) actually does do research and knew a bit more in 2008 than folks at The Oil Drum.

The End of Growth part 2: growth didn’t begin with oil and coal

I’m continuing to read The End of Growth by Richard Heinberg. His book claims that, from his vantage point in 2011, economic growth is no longer possible and that any future growth is a myth propped up by financial trickery. Part of his thesis rests on the idea that economic growth as we know it only came about through continued advancements in hydrocarbon extraction. Oil, coal, and natural gas, these are all commodities of incredibly high energy density but incredibly low transportation costs: burning them is easy and liberates energy. This energy then powers economic growth. He blithely asserts that prior to the discovery and utilization of these hydrocarbons economic growth basically didn’t exist, and when we have used up the last of these hydrocarbons it will cease once again. It’s that first bit I’d like to take issue with today.

Economic growth didn’t start with coal. Mr Heinberg seems to have a very Eurocentric and modern-centric view of history, ascribing 100% of all economic growth to the time after the industrial revolution. It’s true that in millennia past, a nation’s power lay mostly in its raw population total. That’s because 90%+ of all people were usually subsistence farmers, and mobilizing their labor for war or public buildings was how most nations used their power. But growth still occurred before the industrial revolution, and we see evidence of it through history.

For example: technology is growth. If every single year an average person can do more and more using less and less, isn’t that a case of economic growth? Wouldn’t we measure that as an increase in GDP? And technology has been progressing for every millennium of human history, not just the last few centuries. Take Italy in the 16th century and compare it to Roman Latium from the 1st century, a middle class urban Italian could enjoy luxuries the likes of which a senator or emperor could only dream of. Take books for example, in Latium it would have taken a team of scribes several weeks or months to copy by hand all of Julius Caesar’s Bello Gallico, meaning that copies were limited and had to be fiercely protected. Meanwhile an Italian with a printing press could print off a few hundred copies all by himself, selling them and other books out to middle class folk and letting middle class libraries expand to point that people could spend their entire lives just reading (and some folks did just that). In a very real sense we would say that the printing press led to a growth in the Italian economy, because more books could be made with less labor. This freed up labor to do other things, those former scribes could now go on to be writers themselves, or inventors or even go back to the field as farmhands.

If you took the GDP per capita of Roman Latium and compared it to the GDP per capita of 16th Century Florence, you’d find a hell of a lot more stuff being produced per person per year. The printing press and technological innovations like it had allowed the Italian economy to grow in ways that didn’t require extracting more resources out of the ground, and the same holds true in our economy today.

So even if the very last drop of oil or nugget of coal is extracted from our earth, why would we ever believe that growth would stop right there? Oil, coal and gas are just useful stores of energy, there are other ways to store and transport energy that we could use, and further technology that we can develop to grow our economy. A cheap, fast, and accurate 3D printer using solar power and bioplastic would lead to considerable economic growth, and there’s no reason to think its invention would be impossible in a world without oil. So while it may be true that oil is a finite resource, that truth bears no relation to truths about economic growth. Growth has never required oil, even today solar and wind power are becoming greater and greater proportions of our national electric grid, and when we finally transition away from oil growth will not stop, just as the Italians didn’t need oil to start their growth in the 16th century.

The end of growth?

I’m doing that thing again where I read old books just to dunk on the authors. This time it’s “The End of Growth” by Richard Heinberg. Written in 2011, here’s how it starts:

The central assertion of this book is both simple and startling: Economic growth as we know it is over and done with

Heinberg goes on to say that although countries may still experience a few quarters or even a whole year of growth,

the general trend-line of the economy (measured in terms of production and consuption of real goods) will be level or downward rather than upward from now on

Not only that, but Heinberg goes further in decreeing that this is true for the entire world, not just any one nation. Any national growth in one nation (which will necessarily be very small, as stated above) will be balanced out by a reduction in the size of the other economies of the world. Heinberg confidently asserts:

the global economy is playing a zero-sum game, with an ever-shrinking pot to be divided among the winners

This is, to put it bluntly, laughable. It was crockery in 2011 and it’s only been proven more ridiculous as time has gone on. It goes back to my post from before about how everyone is always fighting the last war, in 2011 with growth still anemic this seemed like a defensible conclusion but today, not so much. And more broadly, history has proven this thesis to be wrong startlingly quickly: the Federal Reserve has a handy-dandy chart of US GDP in constant dollars (ie dollars accounting for inflation) and we can use it to see that in 2011 the GDP was about 17 trillion dollars, and by 2019 (the most recent year on the chart) it had climbed to 20.5 trillion; a growth of 20% over just 8 years. And it’s not like this is fake growth either, you can see it in the cars we drive and the gadgets we use: lane assist, rear-facing cameras for backing up, electric vehicles, hell even smartphones and tablets. These are all new and useful things that we didn’t have as much of in 2011. Just 31% of Americans owned a smart phone in 2011, today that number is nearly 90%. Just a quick look around us should dispense with this idea that growth has ended, even the consumption of oil, electricity, and natural gas have gone up. Real growth in our economy has occurred.

So the trend-line for America has most decidedly not been flat, but what about the rest of the world? Have we merely stolen growth from everyone else? Hardly. Look at China and India, two countries accounting for around 1/3 of the world’s population, their economic growth has continued to outpace America since even before 2011. They’re growing faster than us, using even more oil, electricity, and natural gas, and buying even more smartphones and electric cars than we are. They are definitely growing in a very real economic sense. And what about the rest of the world? Europe hasn’t grown quickly, but they are by now means trending downward, and neither are Africa, South America, or the rest of Asia and North America. Every part of the world’s economy has seen real growth in the past decade, with real increasing in living standards being the norm not the exception.

And this isn’t an illusion. Mr Heinberg seems strongly intent on portraying any semblance of “growth” as nothing more than an illusion created by debt, yet the fact that I’m typing this out on a laptop that’s computationally stronger than my 2011 desktop seems to put paid to that idea. Heck, I’m in science, 10 years ago Cryo-EM was barely able to do any of the stuff we take for granted today, now we can image and define the structure of thousands of proteins relatively easily. Is this just an illusion? Is our ever-expanding catalogue of verified antibodies for scientific experiments an illusion? What about the fact that just 2 years ago we invented and deployed an entirely new type of vaccine for a disease no one had ever heard of before? That literally happened, and it isn’t an illusion. Technology has continued to rapidly progress since 2011 and shows no signs of stopping, Mr Heinberg’s thesis on growth seems utterly ridiculous. And even our base inputs continue to go up, the amount of oil pumped and burned continues to go up year after year, alongside the amount of electricity the world is using. I’d love to hear Heinberg’s explanation for how world energy consumption keeps increasing year after year despite our growth having ended.

So why did Mr Heinberg think that growth was ending? Well I’ll have to keep reading, but I think that like I said he was simply fighting the last war. The Financial Crisis was a real shock to a lot of people, and the lethargic pace at which the world’s economy recovered from it made people think that it was a new normal. But it wasn’t. Secretly I also wonder if Mr Heinberg is of the heterodox economic school which believes that steady-state or even de-growth is preferable to economic growth. When one looks at all the resources humanity is using one instinctively feels they must eventually all run out. But Malthus predicted we’d outstrip our food supply centuries ago and despite him and many others believing this to be true, year after year people are eating more and living longer than they ever did, along with enjoying more and more of the amenities of modern life. I don’t know what Mr Heinberg was thinking when he wrote this book, but on the first page I can already say lol, lmao even.

Let’s see how he defends his thesis.

I’m amazed how little some of my friends can cook

Let me be clear, I barely cook. I can cook eggs, quesadillas, frittatas, burgers and some recipes out of a cookbook. I’m not some maestro of the kitchen and I rarely cook because I usually have faster options. But if necessary I can cook things that are edible and tasty enough to satisfy.

That’s why it’s in some ways baffling that I have so many friends who have cook even less than I do. I texted a picture of a baked-from-the-box brownie to one of my friends who replied “wow! you can cook really well!” You add water and bake, does it really count as cooking?

Eh, I guess this is how it is sometimes. Not everyone owns an oven, not everyone even has a full set of cookware in their apartments, especially people around my age. But still, brownies, they’re easy and delicious so you might as well learn to “cook” them.